Can a Tenant Breach a Contract to Enter Into Lease Without a Reason?

Signing on the bottom line of a modern contract is the equivalent of the old-fashioned handshake between gentlemen. Your signature registers your agreement to the terms and conditions of the lease and -- absent justification or a grace period built into the contract language -- the court holds you to the lease terms. However, the landlord must seek a replacement tenant, so your final bill may be less than the full lease amount.

Contracts

Adults entering into a legally binding contract -- if the contract is not for an illegal purpose -- are bound by the terms of the agreement. State laws set some limits on enforceable agreements. For a contract to be enforceable, the parties must have had a "meeting of the minds" about the subject, with one party accepting the other party's offer. In addition, the parties must each get and give something of value. A gratuitous agreement to give a gift is not legally binding.

Lease Contracts

To be legally binding, lease agreements must include those contractual elements. If the tenant believes she is leasing an apartment in San Francisco but the landlord thinks she wants his apartment in Los Angeles, the lease does not represent a meeting of the minds. If both beliefs were reasonable under the circumstances, courts will not enforce the lease. The promise to pay an agreed rent in exchange for permission to occupy the premises constitutes a sufficient exchange of consideration.

Language of Lease Controls

If a tenant enters into a valid lease contract, the contract language sets out her rights. Some leases contain "grace periods," which allow either party to void a contract during the first days after signing the lease. If the lease does not contain grace period language, no grace period applies. In that case, a tenant cannot back out of the lease without becoming liable for contract damages.

Damages for Breach

If you breach the lease without justification, you owe the landlord compensatory damages: the amount of money that he would have received had you lived up to your contract. The landlord will collect a sum from you representing the monthly payments due for the entire term of the lease. However, in most states a landlord must try to "mitigate" damages by locating a replacement tenant. You deduct whatever money a replacement tenant pays from the total amount you owe. If the landlord finds a replacement tenant quickly, you may owe little or nothing in damages.

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